Chip maker Intel has posted its strongest ever first quarter for sales, with profits almost quadrupling year on year.
Riding on the back of renewed market optimism and the resultant upswing in corporate spending on computing hardware, Intel posted sales of $10.3 billion for the first three months of the year. Net income, meanwhile, was $2.4 billion, or 43 cents per share, smashing Wall Street estimates and representing a 288 per cent increase on the same period last year.
Analysts were expecting sales of $9.8 billion. The positive results boosted Intel's shares in after-hours trading to $23.67, more than $1 up on earlier trading.
Based on the results, Intel has adjusted its forecast for the year, saying it is optimistic about the rest of 2010. The processor maker plans to hire 1,000 new staff worldwide in 2010, having trimmed its workforce by nearly 3,000 in the past year to 79,900.
Intel is the first major technology firm to announce quarterly earnings for this year, and the better-than-expected results are in line with the renewed optimism expressed last week by Forrester Research, which adjusted its own IT spending growth forecast for the year upwards to 8.4 per cent.
While Intel's drastic improvement in performance year on year certainly makes good headlines, the first quarter of 2009 was when the economic downturn hit hardware vendors hardest, with a freeze in spending and upgrade programmes killing demand worldwide.
However, Intel chief executive Paul Otellini was cautious in his own analysis. Speaking during the company's earnings call, Otellini said that while companies were clearly spending again, in many cases it was simply because older, more outdated equipment was becoming too expensive to maintain and needed to be replaced.
"I'm still not going to go out on a limb, and our customers aren't going to go out on a limb, and say there's a corporate refresh snapback cycle," Otellini told analysts. "People are buying things to replace older machines because it's just cheaper."
Chief financial officer Stacy Smith forecast revenues of $10.2 billion for Q2, outstripping the $9.68 billion average in an analyst poll by Thomson Reuters.
Rival chip-maker AMD is to post its own first-quarter results tomorrow.
